How to Get an Auto Loan After Bankruptcy

Getting an auto loan after bankruptcy is possible if you can prove you are credit worthy despite your tarnished financial history. To do this, you must carefully prepare an application to anticipate the questions a lender will ask before they ask them. For example, address the following:

  • What was the cause of the bankruptcy? The bankruptcy should be an isolated event in your history. You should be able to establish that you have learned tough lessons about credit history and do not plan to repeat them.
  • Have you recovered financially? You should be able to establish that the circumstances surrounding your bankruptcy no longer exist and have been eliminated.
  • Have you been employed consistently with increases in salary? A consistent work history can provide the lender the evidence that you are a stable and responsible person.
  • Have you secured and paid off other loans since the bankruptcy? Your credit history after a bankruptcy is indicative of your new credit patterns.  Be sure to pay everything on time after a bankruptcy.

You should also be prepared to take on higher interest rates. A bankruptcy increases your risk for a lender. If you are ready for higher rates and payments, though, you can secure a loan and start rebuilding good credit after your bankruptcy. Installment loans, such as auto loans, are a great tool to reinstate good credit if you make payments consistently.

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